Portugal Just Threw Another Dagger At Europe — And People Think We're Seeing Global Growth Crumble All Over Again

If you want to feel gloomy as things get going again, check out
the latest from SocGen's Kit Juckes, who talks about the
Portuguese Supreme Court rejections of austerity measures, and
the fear that global growth is crumbling again.

The weekend talk is all Euro and of course, all bearish. The CFTC
data on Friday night confirmed that the market got itself good
and short euro and good and long dollars and that set the scene
for the bounce. But Draghi DID hint at lower rates. And
then Portugal's constitutional court threw a fast ball at the
Portuguese government. Apparently, cutting pay
and benefits for the public sector is unfair on the rest so they
need to try again. The result is that there's a hole in
the austerity plan and everyone else (ie Spain) is looking to see
what happens. Europe has no growth plan, and austerity into
recessions is unpopular. And perhaps unconstitutional.

Meanwhile, Jens Weidmann is spelling out the same uncomfortable
and austere message about winding up banks and the public sector
not always being there to bail everyone out, as
Dijsselbloem. The bottom line of all this is always the
same - don't count on growth. Gavyn Davies meanwhile has a piece
in the FT wondering whether we are, yet again, seeing a winter
bounce in global growth crumble in the face of spring. And he
thinks Germany is critical. Oops, German data are
softening too. ECB will ease further, Europe still lacks a growth
plan,it would still be better if the ECB actively pushed the euro
down, but that takes a huge mind-set shift. Europe is still
trying to be Japanese and even after Friday's nonsense, have you
seen how low long-dated JGB yields are in Japan?

So yes, on the plate are: The craziness in Japan, collapsing Euro
growth, and now this pesky constitutional court in Portugal
saying that some austerity measures are not allowed.